ESSAR PORTS LTD.,MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX-CIRCLE 6(1)(1), MUMBAI

MA 170/MUM/2024

AI Insights

The case involves Essar Ports Ltd., the appellant, challenging the order of the CIT(A) regarding disallowances made under section 14A of the Income Tax Act, 1961, which were related to the computation of taxable income and book profit under section 115JB. The primary legal contention was whether the provisions of section 14A could be extended to section 115JB, which falls under Chapter XII-B of the Act. The Income Tax Appellate Tribunal, Mumbai, after reviewing the matter, decided in favor of the assessee, referencing the decision of the Special Bench in Vireet Investments P. Ltd., which clarified that such disallowances are not applicable when computing book profit under section 115JB.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473360 (ITAT-MUMBAI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2015-2016
• Other Referred Cases: ACIT vs. Vireet Investments P. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAHITA NAIR
• Assessee Lawyers: VIJAY MEHTA
• Keywords: Set aside; Earning of tax free income
• Section: 14A; 115JB

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘K’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SMT RENU JAUHRI , ACCOUNTANT MEMBER MA No.170/Mum/2024 (Arising out of ITA No.406/Mum/2024) (Assessment Year :2015-16) M/s. Essar Ports Ltd. 11th Floor, Essar House 11, K.K. Marg Mahalaxmi Mumbai – 400 034 Vs. Asst. Commissioner of Income Tax Circle-6(1)(1) Mumbai, Range 6(10) PAN/GIR No.AAACE8391D (Appellant) .. (Respondent) Assessee by Shri Vijay Mehta Revenue by Smt. Mahita Nair Date of Hearing 09/08/2024 Date of Pronouncement 30/01/2025 आदेश / O R D E R PER AMIT SHUKLA (J.M): In the Miscellaneous Application filed by the assessee it has been stated that the Revenue has challenged the order of the ld. CIT(A) on the following grounds:- 1. \"Whether on the fact and in the circumstance of the case Land in law, the Ld. CIT(A) erred in directing the AO to restrict the disallowance u/s. 14A of the I.T. Act, 1961 at Rs. 22,08,04,470/-, when the asses500 company while computing its taxable income suo-moto disallowance u/s. 14A at Rs. 38,00,65,574/- as against the exempt income of Rs. 22,08,04,470/-? MA No.170/Mum/2024 Essar Ports Ltd., 2 2. \"Whether on the facts and in the circumstances of the case p and in law, the Ld. CIT(A) erred in directing the AO to delete the disallowance u/s. 14A of the I.T. Act, 1961, of Rs. 38,00,65,574/- which the assessee company suo-moto made while computing income as per the provisions of section 115JB of the I.T. Act, 1961 and there by upholding that provisions of section 14A cannot be extended and read into section 115JB, falling under Chapter XII-B of the Act? 3. The Appellant revenue prays that the order of the Ld. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. 4. The appellant craves leave to amend, or amend, or alter any grounds or add a new ground, which may be necessary.\" 2. However, while ground No.1 of the appeal the disallowance u/s.14A was passed in favour of the assessee however, ground No.2 in respect of disallowance u/s.14A of the Act for the purpose of book profit u/s.115JB remain to be decided. On merits, he submitted that this issue stands covered by the decision of the Special Bench in the case of ACIT vs. Vireet Investments P. Ltd. reported in 82 taxmann.com 415 and other judgments of the Hon’ble Supreme Court. 3. From the perusal of the Tribunal order it is seen that by inadvertent mistake, ground No.2 could not be decided. Hence we are deciding it in this application filed u/s 254(2). Since already disallowance u/s.14 was decided in favour of the assessee, therefore, no disallowance u/s.14A and u/s.115JB can be made and otherwise also while computing book profit u/s.115JB, no disallowance of u/s.14A can be made. It is well settled law by the decision of the Special MA No.170/Mum/2024 Essar Ports Ltd., 3 Bench in the case of Vireet Investments P. Ltd, accordingly, Miscellaneous Application filed by the assessee is allowed. 4. In the result, Miscellaneous Application filed by the assessee is allowed. Order pronounced on 30th January, 2025. Sd/- (RENU JAUHRI) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 30/01/2025 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// "